January 7, 2015
Mortgage rates in general moved within a narrow range of numbers in 2014, and with the anticipation of the new year, many hoped to see rates take a turn for the better and move below what seemed to be the floor in 2014 for rates. And now in the early days of the new year that seems to be happening.
Best execution mortgage loan rates–which are not available to all borrowers or from all lenders–have dipped into the mid three percent range going down to an impressive 3.625% for the most qualified borrowers. That’s the rate for 30-year fixed rate conventional mortgage loans, best execution. That rate is offered to borrowers depending on FICO scores, loan repayment history and other financial qualifications.
But what about FHA mortgage loan rates? Are they moving in the same way?
At the time of this writing, FHA mortgage loan interest rates (best execution) remain in their comfort zone of 3.25%. That number has been the best execution rate for FHA loans now for some time. When rates change for 30-year fixed rate conventional mortgages, it can take time for FHA rates to catch up to these changes–FHA rates are already lower than conventional loan rates, and it takes sustained movement or more significant increases on a single day to push FHA rates higher in some cases.
The FHA best execution rate of 3.25% can and does vary among lenders–FHA rates do tend to have greater variation between financial institutions than conventional mortgages. The going advice at the moment for some borrowers is that floating–waiting to get an interest rate lock until a better best execution rate prevails–might be risky at times when rates move to headline making lows. Right now rates do seem to be doing just that, so it’s a matter of evaluating the risk in waiting. Borrowers should make the most informed choice they can when it comes to an interest rate commitment, and in the end it’s up to the borrower.
Some believe with the rate movements we’ve seen lately that some form of push back is bound to happen–keep than in mind when deciding what to do with locking or floating.
Do you have questions about FHA home loan rates? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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